The Debt Crisis: What Next?

The growth of the British economy over the last two decades has seen a parallel rise in personal debt across the social spectrum.

A major research project by sociologists at the University of York will examine the nature and consequences of an economic system that prospered as a result of easily available credit.

The research team will conduct confidential interviews with people struggling with debts of all types, to establish both the reasons for their financial situation and possible routes out of indebtedness.

One of the research team, Mark Horsley, said: "Cheap and easily available credit prompted a sustained growth in house prices and encouraged the rapid expansion of other consumer markets. Many consumers marginalised anxieties about affordability in the belief that house prices would continue to rise,
and carried on spending in the belief that their income would always be greater than their outgoings.

"There is evidence to suggest that some people at the margins of society have used easily available credit as a form of substitute welfare to maintain basic living standards for themselves and their families. We are interested in the effect indebtedness has on the lives of individuals, the
strategies employed by various debt collection agencies and in government policy on debt issues."

The specific content of the interviews will depend on individual situations but are likely to consider the availability of credit, the funding of
consumer lifestyles, the psychological impact of debt and experiences with debt collectors and debt advice services.

"We see this research shedding light on the hidden side of credit availability. It will provide detailed case studies that CAB and other organisations may use to highlight the plight of their clients. It will also provide us with raw data to influence policy both on the road out of recession and the effective management of debt in our economy," Mr Horsley added.

Provided by University of York